Geekzone: technology news, blogs, forums
Guest
Welcome Guest.
You haven't logged in yet. If you don't have an account you can register now.


View this topic in a long page with up to 500 replies per page Create new topic
1 | 2 | 3
5408 posts

Uber Geek
+1 received by user: 1439

Moderator
Trusted
Lifetime subscriber

  Reply # 101013 20-Dec-2007 12:26
Send private message


What would you rather pay? $200 (random figure), to have your console covered for 5 years? With very little effort required on your part.


that's my ideal.

4331 posts

Uber Geek
+1 received by user: 94

Moderator
Trusted
Lifetime subscriber

  Reply # 101014 20-Dec-2007 12:29
Send private message

bazzer:

I disagree. Those extended warranties are a waste of money (the are basically pure profit to the retailer). It seems that if the xbox breaks even after 1 year time frame (especially if a lot of units are doing the same) it would seem that it was not of acceptable quality (i.e. durable - last for a reasonable time). I wouldn't consider an $800 console that only lasts 2 years to be a reasonable length of time.

I am not sure about it being PURE proftit to the retailer. They still have to pay for employees, power, rent etc. And consoles, pc's, mp3 players are all examples of low/no profit items.
Most companies who provide extended warranties have no relationship the the company selling the warranty. Eg, Noel Leeming and DSE use IUG as their extended warranty providers, so most of the "profit" that you talk about will end up in their pocket.
So how much profit would a retailer make off selling you a $800 console + exntended warranty ($200)= $80 + 70 = $150

That $150 (purely specualtion), has to cover, wages, power, rent, freight etc etc.

Pure profit, I do not think so. But yes they will make money out of it.

 
 
 
 


3295 posts

Uber Geek
+1 received by user: 211

Trusted

  Reply # 101018 20-Dec-2007 12:46
Send private message

I think you misread my post.  Before you buy the extended warranty you've already made the decision to buy the appliance/console/whatever (the retailer's core product).  They've already made the sale, made the profit on the product that they've priced to cover their overheads.  The extended warranties are surely marginally priced?  There's no danger there, because you're only selling these on the back of another sale.  To use your example, the $70 on the extended warranty is pure profit compared to the guy who came in just before you and only bought the console and who will rely on the CGA to protect him (as well it should).

Personally, I'd rather keep the $200 in my own pocket...

4331 posts

Uber Geek
+1 received by user: 94

Moderator
Trusted
Lifetime subscriber

  Reply # 101022 20-Dec-2007 13:04
Send private message

bazzer: I think you misread my post. Before you buy the extended warranty you've already made the decision to buy the appliance/console/whatever (the retailer's core product). They've already made the sale, made the profit on the product that they've priced to cover their overheads. The extended warranties are surely marginally priced? There's no danger there, because you're only selling these on the back of another sale. To use your example, the $70 on the extended warranty is pure profit compared to the guy who came in just before you and only bought the console and who will rely on the CGA to protect him (as well it should).

Personally, I'd rather keep the $200 in my own pocket...


I'm not too sure where I have mis-read it?
Generally speaking the consumer has made up their mind to buy the console before, though it does depend on each consumer, and the salesperson technique.

As I stated before, consoles, Pc's, notebooks, mp3 players (especially iPods) are low or no profit items. So none, or very few of the overheads are covered. That is why salespeople will try to add on the accessories and extended warranties. Those secondary items are what turns a profitless sale into profit. Retailers are around to make a profit, and not to sell goods to consumers to only cover cost.

Extended warranties are out there as there is demand for them. If people were not demanding it, then they would not be made available.

I am not trying to argue that the CGA will not cover you. I am just pointing out that there is a need for extended warranties due to the way that the CGA is worded, and how it gets interpreted by different people.

You can keep our $200, I know that I would buy extended warranties on a case by case basis. Can I live without my washing machine? No not really. Can I repair my own computer? Yes.
For most people I am sure they would consider an extended warranty if they knew the benefits of it, and the pitfalls of the CGA and its wording.

1874 posts

Uber Geek
+1 received by user: 84

Trusted

  Reply # 101023 20-Dec-2007 13:06
Send private message

i too dont want to go through the hassle of CGA, why bother when in all reality they could turn around and say your not covered, what then? throw my $800 elite in the bin (or pay the exabraunt microsoft repair prices once out of warranty?) or i could have spent $150 that will protect that said $800 investement over a 5 year period, ESPECIALLY on a product that has a knowen problem.. i know it was my money well spent, i dont have to worry that in a years time when the microsoft warranty expires that i WILL get it replaced when it breaks (i know it eventually will lol).. they call that peice of mind..

3295 posts

Uber Geek
+1 received by user: 211

Trusted

  Reply # 101026 20-Dec-2007 13:25
Send private message

rscole86:
I'm not too sure where I have mis-read it?

Well, I made the statement that extended warranties are basically pure profit.  You started talking about overheads and low/no profit items such as consoles/mp3 players etc.  I was not considering what the item being warranted was, just that extended warranties add bottom-line profit.

I agree that the retailers are around to make profit, how do they do that?  You yourself said that such warranties turn a profitless sale into profit (i.e. they add pure profit!).  The same could be said for the accessories I suppose, but at least you're getting something of value.  I consider the extended warranties to have very little value, but maybe that's just me.

Interestingly, you also imply you'd purchase the extended warranty on an item such as a washing machine, is this item also no/low profit?  Does this change the way you treat the profit from the warranty?  Are there any things sold at Noel Leeming at a profit, or only the accessories/warranties?  In fact, you'd like to say most of the items they sell only exist so that they can sell their primary profit generating items such as extended warranties?



167 posts

Master Geek


Reply # 101027 20-Dec-2007 13:32
Send private message

I was told by someone at the commerce commission that extended warranties are a scam and the CGA should cover it.

I don't see why I have to pay the extra $200 to extend a warranty (that I thought was pointless because Microsoft has a 3 year warranty) because Microsoft is selling a faulty product.

They tried to cut costs by using cheap hardware when all it's done is cost them more (I'm guessing) because of all the consoles they have to repair now for free.

I think you'll find that on most forums which talk about the xbox 360, there will be a huge thread/s about hardware failures.

4331 posts

Uber Geek
+1 received by user: 94

Moderator
Trusted
Lifetime subscriber

  Reply # 101028 20-Dec-2007 13:40
Send private message

As this is going off topic now, this is the last comment I will make. Feel free to make a new topic discussing this if you want to.

bazzer: Well, I made the statement that extended warranties are basically pure profit. You started talking about overheads and low/no profit items such as consoles/mp3 players etc. I was not considering what the item being warranted was, just that extended warranties add bottom-line profit.


Well considering that extended warranties can generally only be purchased with primary lines, then yes it is helping with the lower profit margin products.
As I stated previously, I am not disagreeing with you that there is profit in extended warranties, I just do not agree with your statement of it being PURE profit.


I agree that the retailers are around to make profit, how do they do that? You yourself said that such warranties turn a profitless sale into profit (i.e. they add pure profit!). The same could be said for the accessories I suppose, but at least you're getting something of value. I consider the extended warranties to have very little value, but maybe that's just me.


Again, I do not think that they add pure profit. Maybe pure profit is just the incorrect word you are using. They do add profit, but a part of that is used to cover expenses.


Interestingly, you also imply you'd purchase the extended warranty on an item such as a washing machine, is this item also no/low profit? Does this change the way you treat the profit from the warranty? Are there any things sold at Noel Leeming at a profit, or only the accessories/warranties? In fact, you'd like to say most of the items they sell only exist so that they can sell their primary profit generating items such as extended warranties?


I have no idea what the cost is to a retailer on a washing machine, I was merely pointing out that I make judgment calls on what I buy extended warranties on. I do not know what the profit margins are on goods at Noel Leeming, they are just being used as an example. Please feel free to replace Noel Leeming, with DSE or HN or similar.

How do you figure that I think that extended warranties exist to make retailers profit? It helps them make a profit, as do all products in the end. What I did say however was..

rscole86: I am just pointing out that there is a need for extended warranties due to the way that the CGA is worded, and how it gets interpreted by different people.


As I said in my first line, this is getting off topic, so I am no longer going to comment. I would suggest that we let this go back on topic.

3295 posts

Uber Geek
+1 received by user: 211

Trusted

  Reply # 101029 20-Dec-2007 13:42
Send private message

Bingo!  I'm all for insurance, but would you buy insurance to protect you against a workplace injury?  No, you're already covered by ACC (I mean you pay for that, but that's not the point I'm making).  Why would you pay extra for cover you already have?  The xbox 360 is now covered by a 3 year warranty.  Kinda makes that 5 year extended warranty seem poor value, you're really only paying for 2 extra years.  About the only thing those warranties are good for is if they cover accidental damage, not covered under the manufacturer's warranty/CGA (i.e. dropping, power surges etc).

Doesn't negate the fact that retailers love 'em because they generate pure bottom-line profit ;)

3295 posts

Uber Geek
+1 received by user: 211

Trusted

  Reply # 101030 20-Dec-2007 13:52
Send private message

rscole86:
Again, I do not think that they add pure profit. Maybe pure profit is just the incorrect word you are using. They do add profit, but a part of that is used to cover expenses.

OK, maybe we agree and you just don't like my choice of words?  Seems like you only consider "pure" to mean 100% and if so, no problem but that's not what I meant.  I just meant it adds bottom-line profit (adds profit with no increased costs), free from any extraneous matter i.e. they take the profit (even a portion of the cost) and that's the end of their concern.

As I said in my first line, this is getting off topic, so I am no longer going to comment. I would suggest that we let this go back on topic.

Agreed.  I guess we got here because The Warehouse didn't honour their responsibilities under the Consumer Guarantees Act?  Or because xbox 360 is plagued with hardware problems?  Either way, if I liked it that wouldn't stop me from buying one as long as they come to the party regarding repairs (and sounds like they have, considering the warranty extension).

63 posts

Master Geek


  Reply # 101036 20-Dec-2007 14:27
Send private message

I thought the 3 year warranty is only for RROD?



167 posts

Master Geek


  Reply # 101050 20-Dec-2007 15:04
Send private message

gazza27: I thought the 3 year warranty is only for RROD?
It is. I got the RROD so I was in warranty. The x360 they sent me back though does not have the RROD, just no video. When I was on the phone with customer support, they didn't say anything about charging to fix it because they renewed the warranty I believe.

3 posts

Wannabe Geek


  Reply # 102979 4-Jan-2008 23:37
Send private message

mate by now you must have it back by now but that is knowen as the red ringof death, usually means overheated or circutry issues



167 posts

Master Geek


  Reply # 106218 23-Jan-2008 03:03
Send private message

I have got it back from Microsoft but The Warehouse ended up saying they will replace it (I don't have the exact details here).

5 posts

Wannabe Geek


  Reply # 106419 23-Jan-2008 22:51
Send private message

im just replyin in general to this whole post, doesnt relly refer to anyone in particular, or any part of it in particular.

So some of you seem to think that by a retail store doing a straight exchange of an xbox is wrong, such as eb games. that you have to deal thru microsoft. what eb games and other stores are doing is fine. I am a sales person at DSE so i knw the routines. If we get someone come back with there xbox saying its fauly nd all that, we cld just send it away as a service repair and be done with it, they might wait a while for it to come back. But often enuf since we are such nice people(lol) we will do an exchnage, giving the customer a new one, and we will send the faulty unint away as a store repair. so its still thru Microsoft, but in this case the customer is us, been DSE. you might think ok thats a waste of money, but because we are a massive company microsoft just takes the faulty unit and credits DSE with a new one. Same thing will apply for EB Games.

Next! Warrentys, let me clear this up. yes sometimes they are worth it, othertimes no! and yes they are a profit maker, any good salesperson will sell a extended warrenty and other accessories with a product. i do! a warrenty is pure profit. say if we sell 20 extended warrentys in one day at DSE, how many of those people will actually have a problem with there product? maybe 5 or less. and the money to repair that will be very little compared to the profits made on all the warrentys purchased where no one has had a problem.
In saying that, it doesnt mean a warrenty is bad, i wld deffinatly reccomend a warrenty on things such a LCD televisions etc, real high priced items. its worth it, who wants to pay $2000 for a new 42" LCD 2 years down the track coz the panel has failed. But for smaller things such as mp3 players and the likes of, why the hell wld u want a 5 year warrenty on one of em? 5 years down the track a 8gb Nano is gonna be old, u will have a new one by then lol. Yet i still manage to talk people into buyin them, silly customers lol.

1 | 2 | 3
View this topic in a long page with up to 500 replies per page Create new topic



Twitter »

Follow us to receive Twitter updates when new discussions are posted in our forums:



Follow us to receive Twitter updates when news items and blogs are posted in our frontpage:



Follow us to receive Twitter updates when tech item prices are listed in our price comparison site:





News »

NZ and France seek to end use of social media for acts of terrorism
Posted 24-Apr-2019 12:13


Intel introduces the 9th Gen Intel Core mobile processors
Posted 24-Apr-2019 12:03


Spark partners with OPPO to bring new AX5s smartphone to New Zealand
Posted 24-Apr-2019 09:54


Orcon announces new always-on internet service for Small Business
Posted 18-Apr-2019 10:19


Spark Sport prices for Rugby World Cup 2019 announced
Posted 16-Apr-2019 07:58


2degrees launches new unlimited mobile plan
Posted 15-Apr-2019 09:35


Redgate brings together major industry speakers for SQL in the City Summits
Posted 13-Apr-2019 12:35


Exported honey authenticated on Blockchain
Posted 10-Apr-2019 21:19


HPE and Nutanix partner to deliver hybrid cloud as a service
Posted 10-Apr-2019 21:12


Southern Cross and ASN sign contract for Southern Cross NEXT
Posted 10-Apr-2019 21:09


Data security top New Zealand consumer priority when choosing a bank
Posted 10-Apr-2019 21:07


Samsung announces first 8K screens to hit New Zealand
Posted 10-Apr-2019 21:03


New cyber-protection and insurance product for businesses launched in APAC
Posted 10-Apr-2019 20:59


Kiwis ensure streaming is never interrupted by opting for uncapped broadband plans
Posted 7-Apr-2019 09:05


DHL Express introduces new MyDHL+ online portal to make shipping easier
Posted 7-Apr-2019 08:51



Geekzone Live »

Try automatic live updates from Geekzone directly in your browser, without refreshing the page, with Geekzone Live now.


Support Geekzone »

Our community of supporters help make Geekzone possible. Click the button below to join them.

Support Geezone on PressPatron



Are you subscribed to our RSS feed? You can download the latest headlines and summaries from our stories directly to your computer or smartphone by using a feed reader.

Alternatively, you can receive a daily email with Geekzone updates.